Author: Rick Pendergraft, Trades Of The Day

It has strong fundamentals and looks like it may have put in a double-bottom in the last few weeks.

The thing that got my attention last night with the underlying stock was that the 10-day moving average just made a bullish crossover of the 50-day. We see the same thing happened in mid-February and then the stock rallied all the way up above $126. I’m looking for a similar outcome over the next five to six weeks and think the $125 range is easily within reach, which would more than double the value of our call option.

The thing that jumps out at me on the underlying stock’s chart is the possible double-top pattern.

This is my “Option Trade of the Day”.

Last time we saw a setup like this, which was at the beginning of May, the stock jumped sharply over the next five weeks or so.